How Small Business Spending Makes a Big Difference
While it’s difficult to track the exact path of a dollar spent locally versus one spent at a chain, you can imagine it looks something like this:
This image is an example of what’s called“indirect impact.” Indirect impact is felt when a local business owner or employee spends the money they make locally, but it’s not the only kind of impact that can be felt by spending local.
When You Shop Local, Small Non-Profits Win
When your son or daughter has a school expense like a club trip, sporting event, yearbook expense, camp, or graduation program, do you email Elon Musk to fund it? No. You ask your local pizza parlour or favourite small business owner. They get their name listed as a sponsor and your child is one step closer to their goal.
Similarly, when it comes to local nonprofits and raising money for local causes or even natural disasters, it’s the local businesses that come through. They understand the importance of helping neighbours. Yes, large companies give hundreds of thousands of dollars to large nonprofits. We’re not discounting that. But local charities and nonprofits are often not on their funding radars. Chains are doing their part donating to the United Way and national groups like the Cancer Society. Local charities often rely on local support.
When You Shop Local, We Enjoy a Better Quality of Life
According to studies compiled by the Institute of Self Reliance, “the more locally owned businesses per capita that a community has, the better off that place is on many of the other indicators of community health. The larger the share of transactions in our economy—buying, producing, investing—that involve a locally owned business, the more thriving, equitable, and resilient our economy and community can be.”
When You Buy Local, Vendors and People Win
During COVID and immediately after reopening, there were supply chain issues (we’re still feeling them in some industries). Many of those issues were due to lack of transportation or lack of labor in the transportation industry. That caused many businesses to look for local options to meet their needs.
When local businesses pay for things they need to do business (like inventory, utilities, equipment and pay to employees) locally, that has a direct impact on the local economy.
Chains and local businesses pay a salary to local employees so they both have a direct impact on the local economy. However, a chain is limited in where it can get its inventory, equipment, and other items from. These costs are probably paid to, or dictated by, corporate. A small business owner makes those decisions themselves and can choose to keep some of those purchases local as well.
When You Shop Local, Jobs are Plentiful
In times when jobs are needed most—in high unemployment—local businesses are there. According to the article “The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment,” which appeared in the American Economic Review, “…in times of high unemployment, small businesses both retain and create more jobs than large firms do.”
Opportunities For You to Shop Local
There are many programs and resources available to help you shop local. Love Local PEI has created a fantastic web resource to help Islanders shop local. They regularly highlight local small businesses, and have a directory of small businesses available to help you find a business locally to satisfy any need.
The local Chambers of Commerce are also great resources for information on local shopping opportunities. For example. the Greater Summerside Chamber of Commerce is hosting a Holiday Block Party on Dec. 3rd, at which you can do some holiday shopping from great local vendors all in one location. This event is free to attend, with donations going to support Christmas Daddies, who send all the money raised at this event back to Summerside to help local kids in need at Christmas. This is a great opportunity to use your holiday spending to invest in your community!
Where you spend your money effects in the growth and prosperity of our area. Make your hard-earned dollars work for you buy spending them locally!